Barney Corporation began business on January 1 2013

The company #6524

Barney Corporation began business on January 1, 2013. The company has released the
following financial statements for 2013 and 2014 and has prepared the following proposed
statements for 2015.Barney Corporation acquired the equipment for $150,000 on January 1,
2013, and began depreciating the equipment over a 10-year estimated useful life with no
salvage value, using the straight-line method of depreciation. The capitalized exploration costs
reflect oil and gas drilling costs that Barney has capitalized under the full cost method.As of
January 1, 2015, Barney has decided to make the following accounting changes.(a) For
justifiable reasons, Barney Corporation changed to the double-declining-balance method of
depreciation for the equipment as of January 1, 2015.(b) For justifiable reasons, Barney
Corporation changed from the full cost to the successful efforts method of accounting for oil and
gas drilling costs as of January 1, 2015. Because none of Barney's drilling so far can be
classified as "successful," all drilling costs would be expensed as incurred under the successful
efforts method.Instructions:In three-year comparative format, prepare the balance sheets,
statements of income, and statements of retained earnings that would be reported in 2015 for
the years 2013, 2014, and 2015. Barney has not yet paid any dividends. Make sure to correctly
treat the accounting changes mentioned above. (Ignore any income tax effects.)View Solution:
Barney Corporation began business on January 1 2013 The company

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